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For a sustained inclusive growth A sustained inclusive growth including double-digit economic growth, further cementing of India Inc foundation, a very strong agrarian economy and larger focus on the education and health sectors- the twin pillars on which rests the edifice of social sector reforms- are major planks of India’s federal Budget 2008-09. This is likely to be last full Budget that the Congress-led UPA government’s Finance minister P. Chidambaram placed in Parliament on February 29 before country’s next general election in 2009. Indian industry as a whole termed the Budget as a “comprehensive, balanced and growth-oriented Budget”. RS 60,000-CRORE DEBT RELIEF The most significant step that the government intends to take, as reflected in the Budget, is the Rs. 60,000-crore debt relief package benefiting 40 million farmers. Increase in spending on social sector schemes and relief to income-tax payers are other highlights of the Budget for 2008-09. Under the debt waiver and relief package, small and marginal farmers (with holdings up to 2 hectare) there will be a complete waiver of all loans overdue on December 31, 2007 and which remained unpaid until February 29, 2008. For other farmers, there will be a one-time settlement (OTS) scheme. Under the OTS, a rebate of 25 per cent will be given against payment of the balance 75 per cent. Loans re-scheduled in 2004 and 2006 through special packages and those re-scheduled in the normal course will also be eligible for a waiver or an OTS. The debt relief scheme will be implemented by June 30, 2008 and the covered farmers will be entitled to fresh farm loans from banks in accordance with normal rules. The total value of overdue loans being waived is estimated at Rs. 50,000 crore and the OTS relief at Rs.10,000 crore. The scheme is likely to benefit about three crore small and marginal farmers and one crore other farmers. Expressing hope that the target of agricultural credit for 2007-08 would be exceeded, the Finance Minister has set the target of Rs. 280,000 crore farm credit in 2008-09. Short-term crop loans will continue to be disbursed at interest rate of 7 per cent per year. More investment is flowing into the irrigation sector. Under the Accelerated Irrigation Benefit Programme, 24 major and medium irrigation projects and 753 minor projects will be completed. The outlay for this programme is being raised from Rs 11,000 crore last year to Rs. 20,000 in 2008-09. The Rain-fed Area Development Programme will be implemented, with an allocation of Rs. 348 crore. The Government will establish the Irrigation and Water Resources Finance Corporation with an initial capital of Rs. 100 crore. This Corporation will mobilize resources for major and medium irrigation projects.
Initiatives for rejuvenating the agricultural sector include setting up of 500 soil testing laboratories, introduction of crop insurance scheme for plantation crops and support to cooperative sector reforms. A new insurance scheme for workers in the unorganized sector has been announced besides announcement regarding setting up of institutes of higher learning and 6000 high-quality model schools, and provision of Rs. 16,000 crore to cover all rural districts under National Rural Employment Guarantee Scheme (NREGS).
Rs. 32,667-crore food subsidy Keeping in mind the higher cost of construction of houses by the poor, the subsidy per unit for new houses sanctioned under Indira Awas Yojana after April 01, 2008 is being enhanced from Rs. 25,000 to Rs.35,000 in plain areas and from Rs.27,500 to Rs.38.500 in hilly/difficult areas. The subsidy for upgradation of houses goes up from Rs. 12,500 per unit to Rs.15,000. Loans up to Rs.20,000 per unit under the Indira Awas Yojana will be available at the interest rate of 4 per cent. Education & health Calling the education and health sectors ‘the twin pillars on which rests the edifice of social sector reforms’, the Finance Minister announced 20 per cent increase in budget allocation for education and 15 per cent for the health sector. In the area of school education, a model school programme with the aim of establishing 6,000 high quality model schools has been announced. Mid-day meal scheme is to be extended to upper primary classes in Government and Government-aided schools in all blocks of the country. Nehru Yuva Kendras will be opened in all the 123 districts, which presently do not have an NYK. In higher education, three IITs are to be set up in Andhra Pradesh, Bihar and Rajasthan; two IISERs at Bhopal and Thiruvananthapuram; two Schools of Planning and Architecture at Bhopal and Vijayawada; and one Central University in each of the hitherto uncovered States. To encourage children to take up science and R&D, scholarships will be given to students under a new scheme, Innovation in Science Pursuit for Inspired Research (INSPIRE). Highlighting the need for launching a world-class skill development programme in mission mode, the budget seeks to establish a non-profit corporation. The Government will put Rs. 1,000 crore as initial equity in the corporation. Continuing the scheme of upgradation of ITIs, the budget provides Rs.750 crore for upgrading 300 more ITIs in 2008-09. In the Health sector two major interventions are planned. Under the Rashtriya Swasthya Bima Yojana every worker in the unorganized sector falling under the BPL category and his family will get health cover of Rs. 30,000. For the elderly a National Programme for the Elderly is to be started in 2008-09. The budget provides for Rs. 1,000 crore for the Aam Admi Bima Yojana that provides insurance cover to poor households. This will cover one crore poor households in addition to the one crore likely to be covered by September 30 this year. Funds have also been enhanced for the Indira Gandhi National Old Age Pension Scheme. This Scheme has been expanded from November 19 last year to include all persons over 65 years falling under the BPL category. * India’s fiscal year is April-March. SOURCE: Press Information Bureau
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